permanent tsb House Price Index 10 Year Review

2

House Price Index

10 Year Review

House Price Index

10 Year Review

National annual price growth averaged 14.9% over the last 10 years.

Ten year growth rate nationally 270%.

1998 had highest annual price growth (30.0%) & 2001 had lowest (4.5%).

National house price grew from €75k to €280k between 1996 & 2005.

Price gap between Dublin and Outside Dublin increased from €10k to €130k between 1996 and 2005.

Key findingsKey findings

3

House Price Index

10 Year Review

House Price Index

10 Year Review

Key drivers of past price growth - favourable economic & interest rate environment; increasing population.

External shocks have impacted on general growth trends.

1/3 of current housing stock (547,000) was built in last 10 years.

Value of the Housing Stock has grown 4 fold to €412bn in last 10 years (Source ESRI).

Key findings continuedKey findings continued

4

House Price Index

10 Year Review

House Price Index

10 Year Review

Market changes and drivers

Price trends

Property ownership patterns

Agenda

5

House Price Index

10 Year Review

House Price Index

10 Year Review

Market changes

and drivers

6

House Price Index

10 Year Review

House Price Index

10 Year Review Average annual growth 14.9%over the last 10 years.

0%

5%

10%

15%

20%

25%

30%

35%

30.0%30.0%

€150k€150k

€100k€100k€85k€85k

2.4%2.4%

€200k€200k

€250k€250k €290k€290k

7

House Price Index

10 Year Review

House Price Index

10 Year ReviewA number of Government tax/grant changes have introduced in the last 10 years.

0%

5%

10%

15%

20%

25%

30%

35%

Residential Property tax abolished & tax relief on homeloan interest introduced.

Flat 9% Stamp duty on all Investor properties introduced.

FTB's grant abolished

Rent a room scheme introduced

Interest relief on rental properties restored

Stamp Duty rates for Investors tiered up to 9%

Intro. of Stamp duty exemption for FTBs on 2nd hand homes

8

House Price Index

10 Year Review

House Price Index

10 Year ReviewA number of Government tax/grant changes have been introduced in the last 10 years.

0%

5%

10%

15%

20%

25%

30%

35%

Residential Property tax abolished & tax relief on homeloan interest introduced.

Flat 9% Stamp duty on all Investor properties introduced.

FTB's grant abolished

Rent a room scheme introduced

Interest relief on rental properties restored

Stamp Duty rates for Investors tiered up to 9%

Intro. of Stamp duty exemption for FTBs on 2nd hand homes

Bacon 1Bacon 1

Bacon 2Bacon 2

Bacon 3Bacon 3

9

House Price Index

10 Year Review

House Price Index

10 Year Review GNP influence on house price growth.

10.3%

7.7%8.5%

9.5%

3.9%

2.7%

5.1%

4.0%

5.4%

0%

2%

4%

6%

8%

10%

12%

0%

5%

10%

15%

20%

25%

30%

35%

GNP

Price Growth

10

House Price Index

10 Year Review

House Price Index

10 Year ReviewFertile economic and interest rate environment has significantly helped the market thrive.

0%

5%

10%

15%

20%

25%

30%

35%

Ireland EMU member

Start of EMU

Loan rate

3.75%

Loan rate

3.75%Loan rate

7.5%

Loan rate

7.5%

GNP averaged

6.5%p.a.

1996 - 2005

GNP averaged

6.5%p.a.

1996 - 2005

11

House Price Index

10 Year Review

House Price Index

10 Year ReviewExternal shocks seem to have influenced house price growth over the last 10 years.

0%

5%

10%

15%

20%

25%

30%

35%

9/11

Foot & Mouth

TECHBubble

US led Invasion of Afghanistan

War in Iraq begins

Economist &

IMF warnings

Economist &

IMF warnings

IMF warningIMF warning

12

House Price Index

10 Year Review

House Price Index

10 Year Review Affordabilty broadly stable since 1998.

House Purchase Affordability, Mortgage Service Costs

Notes: Affordability is measured by the annual mortgage service cost as a % of personal disposable incomeper person employed, mortgage size based on an assumed loan-to-value ratio of 90 per cent in each year.Data is from the Department of the Environment Housing Statistics Bulletin and the ESRI macromodel.

0

5

10

15

20

25

30

35

40

45

1996 2001

as

% o

d p

ers

on

al d

isp

os

ab

le in

co

me

pe

r p

ers

on

em

plo

ye

d

20 yr 25 yr 35 yr

13

House Price Index

10 Year Review

House Price Index

10 Year Review

Price trends

14

House Price Index

10 Year Review

House Price Index

10 Year Review

Selected price growth rates from 1996 to 2005.

270%

30% 40% 52% 60% 70%

230%

0%

50%

100%

150%

200%

250%

300%

15

House Price Index

10 Year Review

House Price Index

10 Year ReviewPrice gap between Dublin and Outside Dublin has widened to almost €130k in last 10 years

December pricesDecember prices

277,852

79,682

240,201

73,928

368,576

92,342

-

100,000

200,000

300,000

400,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

National

Outside Dublin

Dublin

16

House Price Index

10 Year Review

House Price Index

10 Year ReviewUrbanisation/ commuting/ demand for second homes key drivers of regional differences.

€’000s€’000s

6 month

average prices

6 month

average prices

347314

290260 244 241 233 233

-

100

200

300

4001996

2005

17

House Price Index

10 Year Review

House Price Index

10 Year Review Top 5 and bottom 5 areas by 10 year growth rates.

1996 96-'00 2000 01-'05 2005 96-'05

Wicklow 84,763 158% 218,723 59% 347,158 310%

Dublin 92,342 144% 225,368 64% 368,576 299%

Cork city 76,855 126% 173,536 76% 306,117 298%

Tipperary 57,006 104% 116,299 94% 225,415 295%

Laois 57,090 138% 135,791 66% 225,231 295%

Longford 67,986 78% 121,170 77% 214,527 216%

Monaghan 83,813 81% 151,411 72% 260,559 211%

Galway 92,588 71% 158,184 81% 286,478 209%

Leitrim 66,077 82% 119,939 67% 199,827 202%

Roscommon 75,129 66% 124,872 77% 221,509 195%

Note : Dublin prices are end of year levels, while other prices are yearly average.Note : Dublin prices are end of year levels, while other prices are yearly average.

18

House Price Index

10 Year Review

House Price Index

10 Year ReviewHouse prices for a first-time buyer and non-FTB now diverge by over €60,000.

December pricesDecember prices

249,499

69,792

311,168

89,921

-

100,000

200,000

300,000

400,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

FTB

STB

19

House Price Index

10 Year Review

House Price Index

10 Year ReviewPrices for New and Existing properties have grown by more than three fold, while price gap has remained unchanged in last 10 years

December pricesDecember prices

276,215

85,906

283,708

78,045

-

100,000

200,000

300,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

New

Existing

20

House Price Index

10 Year Review

House Price Index

10 Year ReviewMajority of properties now priced over €250k compared to 1996 when most were less than €100k.

1996

82%

17% 1%

2000

12%

77%

11%

2005

0%

45%

55%

< 100k

€100k- 250k

> €250k

21

House Price Index

10 Year Review

House Price Index

10 Year Review

Property ownership

patterns

22

House Price Index

10 Year Review

House Price Index

10 Year Review

Semi-detached continues to be most common property type

16

20

8

27

40

6

35

23

8

18

Apartment

Bungalow

Detached

Semi-D

Terraced

2005

1996

23

House Price Index

10 Year Review

House Price Index

10 Year Review

Property size shows no change in Dublin, increasing in the rest of Ireland.

1,015

1,229

1,153

1,060

1,326

1,252

1,064

1,402

1,314

1,000

1,100

1,200

1,300

1,400

1,500

1996 2000 2005

DublinOutside DublinNational

Size in sq. ft.Size in sq. ft.

24

House Price Index

10 Year Review

House Price Index

10 Year ReviewSignificant rise in the percentage of apartments within DUBLIN properties since 1996.

12.2%18.0%

3.8%1.2%

9.6%5.3%

45.4% 46.6%

29.0% 28.9%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

APT BUN DET S/D TCE

1996

2005DublinDublin

25

House Price Index

10 Year Review

House Price Index

10 Year Review

Commuter counties (Meath; Wicklow; Kildare; Louth) profile moving towards Dublin.

1.8%6.2%

19.2%

9.1%

25.4%23.3%

38.5%

45.1%

15.1% 16.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

APT BUN DET S/D TCE

1996

2005Commuter

counties

Commuter

counties

26

House Price Index

10 Year Review

House Price Index

10 Year ReviewAlmost 75%of properties OUTSIDE DUBLIN are detached or semi-detached; apartment percentage unchanged since 1996.

2.5% 2.9%

23.5%

11.8%

32.6%

38.3%

25.7%

34.2%

15.7%12.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

APT BUN DET S/D TCE

1996

2005 Outside

Dublin

Outside

Dublin

27

House Price Index

10 Year Review

House Price Index

10 Year Review

Dramatic change in heating source over last 10 years

29

25

45

47

2

7

38

6Electricity

Gas

Oil

Solid fuel

2005

1996

28

House Price Index

10 Year Review

House Price Index

10 Year Review

Summary

29

House Price Index

10 Year Review

House Price Index

10 Year Review

National annual house price growth averaged almost 15% ‘96 - ‘05.

National price increased from €75k in 1996 to €280k at end of 2005.

GNP averaging 6.5% and interest rates down to half pre EMU levels key market drivers.

Affordability broadly stable since 1998.

Dublin and Outside Dublin price difference grown from €10k to €130k

Significant variation in ten year price growth across counties.

55% of properties priced over €250k in 2005 - just 1% in 1996.

50% increase in no. of apts within Dublin properties over 10 yrs.

Properties Outside Dublin getting larger while Dublin ones unchanged

Summary & ConclusionsSummary & Conclusions

30

House Price Index

10 Year Review

House Price Index

10 Year Review

Appendices

31

House Price Index

10 Year Review

House Price Index

10 Year ReviewCounty price differentials have widened significantly, especially in the last five years.

1996 96-'00 2000 01-'05 2005 96-'05Dublin 92,342 144% 225,368 64% 368,576 299%Wicklow 84,763 158% 218,723 59% 347,158 310%Kildare 80,371 135% 188,805 63% 307,589 283%Cork city 76,855 126% 173,536 76% 306,117 298%Meath 86,152 120% 189,373 57% 296,508 244%Galway 92,588 71% 158,184 81% 286,478 209%Cork county 73,114 103% 148,492 91% 284,355 289%Kilkenny 72,218 82% 131,227 99% 260,992 261%Monaghan 83,813 81% 151,411 72% 260,559 211%Kerry 67,874 82% 123,464 105% 253,673 274%Westmeath 67,922 107% 140,399 75% 245,664 262%Clare 69,330 100% 138,799 76% 244,415 253%Wexford 65,953 102% 133,256 83% 244,042 270%Sligo 75,801 88% 142,429 69% 241,217 218%Carlow 61,041 103% 124,128 91% 237,685 289%Cavan 67,626 95% 131,740 80% 236,749 250%Limerick 72,940 88% 137,087 69% 231,332 217%Mayo 69,838 71% 119,732 91% 229,121 228%Louth 66,753 141% 161,197 42% 228,943 243%Offaly 61,146 106% 125,971 81% 227,470 272%Tipperary 57,006 104% 116,299 94% 225,415 295%Laois 57,090 138% 135,791 66% 225,231 295%Waterford 64,609 113% 137,875 63% 224,629 248%Roscommon 75,129 66% 124,872 77% 221,509 195%Longford 67,986 78% 121,170 77% 214,527 216%Donegal 61,463 97% 120,997 70% 205,155 234%Leitrim 66,077 82% 119,939 67% 199,827 202%

€ € €Price gap Top to Bottom 35,336 64,171 168,749

Note : Dublin prices are end of year levels, while other prices are yearly average.Note : Dublin prices are end of year levels, while other prices are yearly average.

32

House Price Index

10 Year Review

House Price Index

10 Year Review

Housing completions continue to set new records Source: Department of the Environment (DOE)

33,70038,842

42,34946,512 49,812

52,60257,695

68,819

76,95480,957

30,000

40,000

50,000

60,000

70,000

80,000

90,000

HOUSE COMPLETIONS

33

House Price Index

10 Year Review

House Price Index

10 Year Review

Population - almost 50%(1.8m) of the pop. aged < 30. Net inward migration accounted for almost half of 65,000 total pop. growth to April 2004 (Source CSO).

14% 14%

17%

15%

13%

11%

15%

10%

12%

14%

16%

18%

(0-10) (10-20) (20-30) (30-40) (40-50) (50-60) (60+)

Age range split of Ireland's 4.04m population

34

House Price Index

10 Year Review

House Price Index

10 Year Review REGIONAL LISTING

BORDER - Cavan; Donegal; Leitrim; Louth; Monaghan; Sligo.

MIDEAST - Kildare; Meath; Wicklow.

MIDLANDS - Laois; Longford; Offaly; Westmeath.

MIDWEST - Clare; Limerick; Tipperary North.

SOUTH EAST - Carlow; Kilkenny; Wexford; Waterford; Tipperary South.

SOUTH WEST - Cork; Kerry.

WEST - Galway; Mayo; Roscommon.

BORDER - Cavan; Donegal; Leitrim; Louth; Monaghan; Sligo.

MIDEAST - Kildare; Meath; Wicklow.

MIDLANDS - Laois; Longford; Offaly; Westmeath.

MIDWEST - Clare; Limerick; Tipperary North.

SOUTH EAST - Carlow; Kilkenny; Wexford; Waterford; Tipperary South.

SOUTH WEST - Cork; Kerry.

WEST - Galway; Mayo; Roscommon.